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Prop. 22: Instacart Provided Some Contract Workers With Stickers, Fliers Promoting Controversial Ballot Measure

(CBS SF / CNN) -- With just weeks left until Election Day, Instacart attempted to leverage the labor of some of its workers to promote its messaging about Proposition 22, a controversial California ballot initiative that could shape how gig economy businesses operate in the state and whether workers are treated as contractors or employees.

According to screenshots posted this weekend by Vanessa Bain, an Instacart shopper and co-founder of a nonprofit called Gig Workers Collective, Instacart prompted a shopper to "retrieve one Prop 22 sticker and insert and place it in your customer's order" before delivering. The shopper could select "found" if the materials were in stock at the store, or "not found," if out of stock.

Instacart confirmed to CNN Business that inserts and stickers were available over the weekend in the staging area at one store in the Bay Area for shoppers to add to orders. It said it does not currently plan to expand the effort but would not explain why it was only offered in one store for one weekend.

The move by Instacart follows Uber and Lyft placing ads supporting Prop. 22 into their apps. For passengers hailing a car, an advertisement pops up saying if Prop. 22 fails, prices and wait times will increase, while drivers will lose their income.

Drivers are also receiving ads through their apps, claiming they would get guaranteed earnings and a healthcare stipend if Prop. 22 passes. But, there are only two options, clicking "yes" or clicking "okay". There is not an option for drivers to click "no."

Hector Castellanos drives for both Uber and Lyft and said the ads first appeared a few weeks ago. "In order to keep working, you have to click 'yes'," Castellanos told KPIX 5 earlier this month.

Prop 22 is part of a big fight happening in the country's most populous state. Uber, Lyft, Instacart, DoorDash, and Uber-owned Postmates have put a combined $185 million into passing Prop 22, which aims to allow companies to continue treating ride-hail and delivery drivers as independent contractors with some benefit concessions granted by the proposition. If Prop 22 fails to pass, workers would likely be considered employees who are entitled to a minimum wage, overtime pay, workers' compensation, unemployment insurance and paid sick leave under Assembly Bill 5, a state labor law that went into effect in January.

"Prop 22 is needed to protect tens of thousands of opportunities for shoppers, and to preserve the affordable and convenient grocery delivery services millions of Californians rely on," said an Instacart spokesperson in a statement to CNN Business. "As part of our support for Prop 22, we're communicating directly with customers and shoppers on this important issue."

"The whole thing is just very, very dystopian and absurd and alarming," said Bain of asking shoppers to deliver campaign materials. Bain opposes Prop 22.

The initiative seeks to side-step Assembly Bill 5, or AB-5, which codifies an "ABC" test to determine if workers are employees who are entitled to labor protections and benefits. Under the test, employers must meet three requirements to prove their workers are independent contractors, including that the contractor provides the service free from the company's control.

In May, the California Attorney General and a coalition of city attorneys sued Uber and Lyft accusing them of misclassifying drivers as independent contractors and depriving them of protections they would be entitled to as employees. An Uber spokesperson said in a statement at the time that it plans to "contest this action in court." A Lyft spokesperson said it is "looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California's innovation economy to as many workers as possible."

Other legal battles in California challenge the classification of workers of the on-demand food and grocery delivery companies.

The Prop 22 campaign materials were made available to both Instacart in-store shoppers, who are employees, and full-service shoppers, who are contractors.

According to Beth Ross, a veteran San Francisco labor and employment attorney, asking workers to distribute the materials raises some red flags. While shoppers could have selected "not found," the idea harms the company's stance that they are not employees under AB-5 "since the requirement that they distribute Yes on 22 literature is the very definition of control," said Ross. (Ross recently coauthored an amicus brief filed on behalf of a coalition of Uber and Lyft driver organizations in the ongoing Uber and Lyft lawsuit being prosecuted by the California Attorney General over worker classification.)

Instacart said it was optional for workers.

Ross said that if workers are considered employees, even presenting it as optional falls into a gray area. The company would know who fulfilled the sample and who selected "not found," something that a court might view as "coercive" as laid out under California's Labor Code.

Labor code provisions "prohibit CA employers from controlling their employees' political activities and requiring employees to adhere to the employer's political views. It seems to me that is exactly what Instacart is doing here," added Ross.

When asked about the labor code provisions, Instacart said the effort was in accordance with campaign finance rules.

Instacart -- which announced last week that it raised $200 million in financing, valuing it at $17.7 billion -- has hundreds of thousands of full-service shoppers in North America, as well roughly 10,000 in-store shoppers, who are stationed inside grocery stores and are part-time employees of Instacart.

© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten. CNN contributed to this report.

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